Employer savings on salary sacrifice (passing on to employee)

Marcon

Zerforax said:

eastcorkram said:

I asked my employer too. Simply said they don't do it. 

Haha true I am expecting another "computer says no" response. I'm tempted to say, you can either increase my salary to £X or find another way to pass on the savings to me. Their net position would be the same if I wasn't using the salary sacrifice.

...and yours would be worse. It's called cutting off your nose to spite your face...

Grumpy_chap

Zerforax said:

My understanding is that generally, employers contribute 13.8% to National Insurance and can therefore generate up to 13.8% savings on any funds processed via salary sacrifice for employees.

How common is it for employers to pass on that savings to employees? 

I previously asked my employer and they said they do not do it. However as I'm planning to increase the amount by way of salary sacrifice, it's to the point where the savings is quite substantial (from my perspective, not the employer).

Some employers pass the saving on.
Some employers don't.
Some employers split the difference.

To be honest, the employer does not need to operate SS and doing so incurs an admin cost so perhaps they need the NI saving to cover that burden.

Zerforax said:

Haha true I am expecting another "computer says no" response. I'm tempted to say, you can either increase my salary to £X or find another way to pass on the savings to me. Their net position would be the same if I wasn't using the salary sacrifice.

That is your choice.  I'd expect a "computer says no" response but in a rather more blunt choice of words.  You asked the question once and received an answer.  Asking the question a second time is unlikely to be fruitful.

Sarahspangles

Zerforax said:

My understanding is that generally, employers contribute 13.8% to National Insurance and can therefore generate up to 13.8% savings on any funds processed via salary sacrifice for employees.

How common is it for employers to pass on that savings to employees? 

I previously asked my employer and they said they do not do it. However as I'm planning to increase the amount by way of salary sacrifice, it's to the point where the savings is quite substantial (from my perspective, not the employer).

If they passed the savings on - or even the difference - and that got out, then they’d have to offer to other employees. And ultimately it comes off their employee budget line and allows them to pay a little bit more if that is the business decision.

If you plan to continue to sacrifice more it might be worth raising in pay discussions. It makes you cheaper than a peer who isn’t sacrificing as much.

Hoenir

Zerforax said:

400ixl said:

Most from what I have seen don't. Some do though.

You also have no right to it through extra employer contributions or by a salary increase. You can insist all you like but there is no obligation on them.

You have the option to find another employer though.

Haha probably not worth throwing my toys out of the pram over. I guess on the employer side it is probably a lot of faff to set up and then they would have to monitor and adjust etc. Helpful to know its uncommon though!

Someone has to cover the administration cost involved in handling employees requests. 

Albermarle

theblueflash said:

It’s not the hill I’d choose to die on - it’s also not the hill I’d choose to meet my demise, were I in Government shoes. It’s minuscule versus other bigger fish to fry.  I believe there’s some benefit to front-loading pension conts. in a financial year - sure someone worked it out here at some point. 

From small beginnings the increased use of salary sacrifice for pension contributions is costing the Treasury Billions in lost NI receipts.

Zerforax

Grumpy_chap said:

Some employers pass the saving on.
Some employers don't.
Some employers split the difference.

To be honest, the employer does not need to operate SS and doing so incurs an admin cost so perhaps they need the NI saving to cover that burden.
That is your choice.  I'd expect a "computer says no" response but in a rather more blunt choice of words.  You asked the question once and received an answer.  Asking the question a second time is unlikely to be fruitful.

It's a big organisation across many countries. Previously I just had asked the UK HR team who said they don't do it as far as they are aware. It's about £5,500 they would be saving in NI employer costs. I guess I presumed when they make an offer, it would be based on what the overall employer cost is for them.

Shimrod

Zerforax said:

Grumpy_chap said:

Some employers pass the saving on.
Some employers don't.
Some employers split the difference.

To be honest, the employer does not need to operate SS and doing so incurs an admin cost so perhaps they need the NI saving to cover that burden.
That is your choice.  I'd expect a "computer says no" response but in a rather more blunt choice of words.  You asked the question once and received an answer.  Asking the question a second time is unlikely to be fruitful.

It's a big organisation across many countries. Previously I just had asked the UK HR team who said they don't do it as far as they are aware. It's about £5,500 they would be saving in NI employer costs. I guess I presumed when they make an offer, it would be based on what the overall employer cost is for them.

My current employer passes on the NI savings and as I contribute a substantial amount into the pension it provides a good boost to the employer contribution. My previous employer kept the savings but paid in 8% of salary compared to the 4% my current employer pays. They argued the I savings were included in their contribution, and for the average employee contribution that was certainly more generous.
Possibly your employer sees it the same way.
Alternatively, if a union is involved in pay negotiations it may be worth raising it that way as a part of a package.

Grumpy_chap

Zerforax said:

Grumpy_chap said:

Some employers pass the saving on.
Some employers don't.
Some employers split the difference.

To be honest, the employer does not need to operate SS and doing so incurs an admin cost so perhaps they need the NI saving to cover that burden.
That is your choice.  I'd expect a "computer says no" response but in a rather more blunt choice of words.  You asked the question once and received an answer.  Asking the question a second time is unlikely to be fruitful.

It's a big organisation across many countries. Previously I just had asked the UK HR team who said they don't do it as far as they are aware. It's about £5,500 they would be saving in NI employer costs. I guess I presumed when they make an offer, it would be based on what the overall employer cost is for them.

The size of the organisation is largely irrelevant.
You have the answer that the savings are not passed on.

You might well be making SS pension contributions north of £40k so the large employer NI saving but the majority of individuals are probably making far smaller SS contributions.  The cost of admin is borne across all the SS participants.  With the individuals making large SS pension contributions, the employer needs to be checking additional factors such as compliance with NMW.

I would really leave this as you already have the answer.

Zerforax

Shimrod said:

My current employer passes on the NI savings and as I contribute a substantial amount into the pension it provides a good boost to the employer contribution. My previous employer kept the savings but paid in 8% of salary compared to the 4% my current employer pays. They argued the I savings were included in their contribution, and for the average employee contribution that was certainly more generous.
Possibly your employer sees it the same way.
Alternatively, if a union is involved in pay negotiations it may be worth raising it that way as a part of a package.

Sounds like some nice employers and helpful to know!

poseidon1

Shimrod said:

Zerforax said:

Grumpy_chap said:

Some employers pass the saving on.
Some employers don't.
Some employers split the difference.

To be honest, the employer does not need to operate SS and doing so incurs an admin cost so perhaps they need the NI saving to cover that burden.
That is your choice.  I'd expect a "computer says no" response but in a rather more blunt choice of words.  You asked the question once and received an answer.  Asking the question a second time is unlikely to be fruitful.

It's a big organisation across many countries. Previously I just had asked the UK HR team who said they don't do it as far as they are aware. It's about £5,500 they would be saving in NI employer costs. I guess I presumed when they make an offer, it would be based on what the overall employer cost is for them.

My current employer passes on the NI savings and as I contribute a substantial amount into the pension it provides a good boost to the employer contribution. My previous employer kept the savings but paid in 8% of salary compared to the 4% my current employer pays. They argued the I savings were included in their contribution, and for the average employee contribution that was certainly more generous.
Possibly your employer sees it the same way.
Alternatively, if a union is involved in pay negotiations it may be worth raising it that way as a part of a package.

Prior to my retirement, for years my employer ( a professional services firm) were happy to not only contribute directly to my HL SIPP ( in preference to the firm's Scottish Widows DC scheme for employees which I was not enamoured with) but also pass on their full employee's NI  savings on my salary sacrifice. That said, the employer's contribution was only 5% so not particularly generous.

It obviously helped that I was considered valuable enough as a manager in  the firm, to make this exception but in all fairness I was the only staff member ( as far as I was aware) , sufficiently interested in being proactive in both managing and boosting my own pension pot, that this garnered a degree of respect for the requests.  I also suspect the partners of the firm had their own personal SIPPs, so understood why I wish to go down that road.

In other words it ultimately depends on the attitude of  your business, but perhaps also your standing amongst the rank and file as to how far the business would be prepared to accommodate your wishes.